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Saudi Arabian Fertilizer, also known as Safco (SAFCO), lost 2.1 percent. Saudi Basic, the world’s biggest petrochemicals maker, dropped the most in more than two weeks. The Tadawul All Share Index (SASEIDX) declined 0.5 percent to 6,592.21 at 12:50 p.m. in Riyadh, headed for the lowest close since June 29. The Persian Gulf region’s Bloomberg GCC 200 Index (BGCC200) retreated 0.3 percent.

“Safco results are weighing down on market sentiment,” said Asim Bukhtiar, an equity analyst at Riyad Capital.

Sitting back to take the long view this summer Arabian business can sense something is changing. Basically a tsunami of cash from recent high oil prices is beginning to crank up local economies whose real estate booms crashed so badly in the global financial crisis.

The impact is most clear in the largest regional economy, Saudi Arabia, which also experienced the least of the real estate bust. The National Bank of Kuwait forecasts record oil revenues of $267 billion for the kingdom this year and 6.9 per cent GDP growth.

Both oil output and oil prices are up. The Arab uprisings have helped, with the kingdom boosting production to offset the loss of Libyan oil. And Brent crude prices have remained stubbornly north of $100.

The next wave of merger and acquisitions is likely to manifest through consolidation. The telecom industry remains fragmented relative to other industries – the largest operators earn a smaller percentage of total industry revenue than peers in other industries do, suggesting that the sector is primed for further consolidation.

As it enters a new phase of inorganic growth, three types of consolidation activity are likely to reshape the telecom industry. Large, cross-border megadeals are expected to dominate.

In-market transactions and consolidation of ownership stakes also will resume, though at a slower pace. The operators that capitalise on this wave of consolidation could emerge as the global winners in the telecom industry.

The indices provide exhaustive equity market coverage for over 70 countries in the Developed, Emerging and Frontier Markets, applying a consistent index construction and maintenance methodology. Regarding the recent extension of the review period by MSCI, he said, "It can be looked at both ways – positively or negatively. We have six months to fine tune and improve the operational time frame of the DvP (Delivery versus Payment) which has been extremely successful in terms of implementation. "We can keep improving it to provide better service to international investors. It also gives us time to keep the discussions open with the stake holders on the issue of foreign ownerships limits which is currently 25% of the free float." On the performance of the bourse in the first six months, Gueris said, "The year started well with trading volume levels around QR 500 Million per day. We''ve had sessions above one billion, but now it is a bit quieter due to the summer vacation." On the effect of the Arab spring in the Middle East, he said, "After the good start it faded a bit mainly because of the unrest in the region and the abrupt reaction of the international investors. "It was a knee-jerk reaction as they did not consider where the turmoil took place. Once the picture was clear the discerning investors realized Qatar is very stable, peaceful and unaffected by the events happening elsewhere." Gueris reiterated the strong fundamentals of Qatar’s economy describing it as "robust and enviable". This explains why the foreign investor "has more confidence in the Qatari economy". "Any other country would dream of having such numbers, two digit GDP (Gross Domestic Product) growth, and wealthiest per capita country in the world. Further ahead there are good prospects with events like the 2022 World Cup besides many other over the next few years which would boost the economy even more," he concluded.

On the back of economic recovery, the UAE is expected to become a costlier place to live in, as per the findings of Economic Intelligence Unit (EIU).

According to EIU, as the economy recovers, and oil and international commodity prices increase, it expects inflationary pressures to re-emerge gradually, especially in light of the projected expansion in infrastructure development.

“We expect inflation in 2011 to average 2.5 per cent owing to an increase in prices of grains, sugar and other basic items. However, low housing costs will keep inflation at a manageable level, at an average of 2.2 per cent in 2011-15.

Beyond the halls of the Isa Cultural Center where Bahrain's political leaders have started a national dialogue, business leaders are pondering how to re-establish the kingdom as the Gulf's leading banking hub.

The latest protests that coincided with the opening of talks between pro-government and opposition groups last weekend, was a reminder that rebuilding Bahrain's tarnished image as a place to do business could prove as challenging as the political process taking place over the coming weeks.

'The impact has been very bad,' said Jamal Fakhro, the first deputy chairman of the Shura Council, the foreign affairs, defence and national security committee. Mr Fakhro is also the managing partner at the consultancy KPMG in Bahrain.

Etisalat's Indian unit could face a US$1.6 billion (Dh5.87bn) fine for alleged foreign exchange violations related to the sale of wireless permits. India's Enforcement Directorate, which has authority over foreign exchange fraud and money laundering, imposed the 70bn rupee fine on Etisalat DB Telecom India for various charges that it says violate the Foreign Exchange Management Act 1999, the Press Trust of India reported.

The penalty had been ordered for 'suspected contravention' of foreign exchange rules inside and outside India by the company.

'Neither Etisalat nor Etisalat DB have received any official communication and is therefore unable to comment at this time. Etisalat … wishes to reiterate it always abides by the laws and regulations of the markets in which it invests,' the company said. Etisalat owns 45 per cent of Etisalat DB.

The Arab Monetary Fund (AMF) expects to lend about US$500 million (Dh1.83 billion) in financial aid this year as Egypt and Tunisia seek help to plug financial holes in their economies, said the fund's director general.

With about $14bn in capital and the ability to boost its resources further if necessary, the fund was capable of meeting requests from economies in the Arab world requiring financial aid, said Dr Jassim Al Mannai.

'Based on what's happening in Egypt and Tunisia, we would expect [they] will need further financial assistance, and we would be ready to help,' he said.

The UAE's banking sector is set to underperform its regional peers over the next 18 months as concerns about a weak real estate market and Dubai's debt overhang will continue to weigh, Business Monitor International has said.

The sector will remain on its slow road to recovery heading into 2012 but concerns will constrain a more pronounced improvement in banks' balance sheets, analysts said in a new report.

They also noted that lending activity levels in the UAE were also well behind that in Saudi Arabia and Qatar.